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Aimco (AIV) Agrees to Settle All Legal Feuds With Airbnb

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Recently, Apartment Investment and Management Company (AIV - Free Report) — better known as Aimco — and Airbnb jointly announced that the companies have agreed to settle all of their disputes and dismiss existing litigations.

In fact, Aimco believes the agreement provides it the ability to control short-term rental activity in line with its contract and property rights. Further, Aimco and the online short-term real estate rental company have agreed to jointly discuss future opportunities in the multifamily housing industry.

Background

Aimco had alleged that its high-end apartment communities’ tenants in Los Angeles have complained about noisy Airbnb tourists.  Therefore, more security staff had to be employed for property monitoring, tracing and expelling unlawful Airbnb guests.

Furthermore, the Denver apartment real estate investment trust (REIT) objected that a huge chunk of Airbnb's revenues was generated from illegitimately renting the properties for the short run which it does not own at all. Airbnb illicitly profits from such transactions. This way, the company was breaching its own Terms of Service.

In July, Aimco received support from a broad coalition in its appeal of the California court decision for the lawsuit. Particularly, the group backs Aimco’s measures to hold Airbnb legally responsible for engaging in brokering and endorsing illegal short-term rentals.

Conclusion

Aimco’s efforts to move ahead of these legal proceedings are encouraging. In addition, it reduces legal costs associated with the litigation, alleviating pressure from the company’s financials. In fact, for the nine-month period ended Sep 30, 2018, other expenses flared up by $7 million, primarily due to legal cost associated with this lawsuit.

Encouragingly, such settlements help restore investors’ confidence in the company and its operations.

Over the past three months, shares of this Zacks Rank #3 (Hold) company have outperformed the industry it belongs to. Its shares have gained 4.7% compared with the industry’s growth of 2.7% during this time frame.


Stocks to Consider

Better-ranked stocks from the real-estate space are Cousins Properties Incorporated (CUZ - Free Report) , PS Business Parks, Inc. (PSB - Free Report) and OUTFRONT Media Inc. (OUT - Free Report) , carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cousins Properties’ funds from operations (FFO) per share estimates for 2018 has been revised marginally upward to 62 cents in the last two months.

PS Business Parks’ Zacks Consensus Estimate for 2018 FFO per share moved 0.5% north to $6.45 in the past month.

OUTFRONT Media’s FFO per share estimates for 2018 has been revised 2% upward to $2.09 in two months’ time.

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